Ending Discriminatory Employment Credit Checks – NYC Leads the Way

Ending Discriminatory Employment Credit Checks – NYC Leads the Way

Earlier this week, we got an e-mail from a single mom named Ann: 

“As a single mom, recently laid off, I truly felt fear I wouldn't be able to get another job due to my daughter's college loans on my credit reports.  I saw yesterday's article in the Daily News "Credit reports to be history" and I felt a new lease on life. I want to thank you from the bottom of my heart.”

Yesterday, the City Council took a big step toward helping New Yorkers like Ann who are down on their luck to get back on their feet, by passing my bill (Intro 261-A) – the strongest of its type in the country – to prohibit employers from using credit checks in hiring and employment.

Check out coverage in the New York TimesDaily NewsWall Street JournalCity Limits, and CBS.

Millions of Americans have poor credit – due to a medical emergency, student loans, layoff, divorce, identify theft, predatory lending, or even the all too common problem of errors on their credit report.

It makes no sense to make it harder for them to get jobs, by using credit checks as part of the hiring process. Even the credit bureaus (who aggressively market the reports) admit that “we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”

But that’s what many employers have been doing. Nationwide, roughly 47% percent of employers use credit checks to assess candidates. That has made employment far harder for New Yorkers like Ann, and also Emmet, Oneika, Alfred, Ramon, Angel, Shelly, Lisa, Gustavo (you can see their testimonials here).

It’s not just unfair – it adds up to discrimination. African-Americans and Latinos struggle more with poor credit than white consumers for many reasons, including predatory lending, income inequality, and the wealth gap. Poor credit also disproportionately affects women, and particularly survivors of domestic violence.

That’s why our new law will prohibit employment credit checks as an unlawful discriminatory practice under NYC’s Human Rights Law. While similar laws exist around the U.S, all include overly broad exemptions that render them ineffective (e.g. carving out all managerial positions, or the entire financial sector, even bank custodians). NYC’s law will provide the strongest protections in the country.

Our law will allow for a few targeted exemptions. Credit checks will still be allowed where required by federal law (e.g. mortgage bankers), for police officers, chief financial officers, and a few other positions. But NYC’s law will end credit screening for the vast majority of positions. Job applicants will be evaluated on their ability to do the work, not on their credit history.

The hard-earned credit for this step forward for civil rights – and the kind of credit we want everyone to know about! – goes to the NYC Coalition to Stop Credit Checks in Employment and their 75+ organizational members, including New Economy Project (whose co-directors, Sarah Ludwig and Josh Zinner, get a special shout-out for incredible work across the three-year campaign for this bill), RWDSU (whose President, Stuart Appelbaum, was with us yesterday and has been leading the way on many issues, including the carwasheros who he now represents), NYPIRG (who organized a dynamic student contingent), Demos (whose research on this topic has been invaluable) and DC 37.

Special thanks to City Council Speaker Melissa Mark-Viverito for prioritizing this issue and supporting its passage today, and to the staff of the City Council and my office who worked hard to make it a great bill. We worked productively with the de Blasio administration to finalize the legislation, and I’m optimistic that Mayor de Blasio will sign the bill into law.

I’m always proud to serve and represent you in the City Council, but on days like this, where we can pass meaningful legislation that will have a strong and tangible impact on the everyday lives of New Yorkers like Ann, Ramon, and Shelly, I feel especially proud.

Thanks for your support, and for helping New York City to lead the country on the path to opportunity.

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